Queen Elizabeth's School Blackburn Ltd & Ors v Banks Wilson Solicitors (A Firm)

Factual and Procedural Background

This appeal concerns a claim for professional negligence brought by the Appellants, a school, against the Respondents, a firm of solicitors, regarding advice and drafting related to a restrictive covenant affecting the height of a building on property adjoining the school. The Respondents drafted a transfer containing a covenant restricting the height of new buildings relative to existing buildings on the property. The Appellants instructed architects to design a new building without being informed of the height restriction. Following objections from the vendor of the adjoining property, the Appellants sought advice from the Respondents' solicitor, who advised that the covenant included chimney pots within the height restriction. The building work commenced but was later altered to avoid possible breach of covenant. The trial judge found no negligence by the Respondents and dismissed the claim. The Appellants appealed.

Legal Issues Presented

1. Whether the restrictive covenant was ambiguous such that there was real scope for dispute about its meaning as at October 1994.
2. Whether the Respondents were negligent in the advice given in October 1994 concerning the meaning of the restrictive covenant.
3. Whether the Respondents had a duty to advise the Appellants of the risk of litigation arising from ambiguity in the covenant.
4. Whether the Respondents breached their duty of care in drafting the restrictive covenant.

Arguments of the Parties

Appellant's Arguments

• The restrictive covenant was ambiguous and not free from doubt, particularly regarding whether the height restriction included chimney pots or was limited to the roofline.
• The trial judge failed to consider relevant factors in the factual matrix, such as concerns from the planning authority about the roofline and the parties’ lack of knowledge about the presence of chimneys.
• The Respondents should have advised that the covenant’s meaning was ambiguous and that there was a risk of dispute or litigation.
• The Respondents’ advice was unqualified and did not sufficiently caution the Appellants about the risks involved.
• It was immaterial that the Respondents were not asked for written confirmation or guarantees; they owed a duty to advise on risks regardless.

Respondent's Arguments

• The proposed alternative wording for the covenant would not have produced greater clarity.
• The trial judge was correct in his construction of the covenant; if the parties intended to restrict the building to the roofline, they would have used the word "roofline".
• The term "building" sensibly includes chimneys and chimney stacks.
• The Respondents were not negligent in their advice, which was consistent with the negotiations and legal principles.
• Even if mistaken, the advice given by the Respondents met the standard of a reasonably competent solicitor.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
ICS v West Bromwich Building Society [1998] 1 WLR 896	Principles of contractual construction considering the factual matrix.	The court applied Lord Hoffmann’s principles to interpret the restrictive covenant, considering the context and intentions of the parties.
Dixie v Parsons [1964] 192 EG 197	Solicitor's duty to advise clients not only on lawfulness but also on risk of litigation when document construction is uncertain.	The court relied on this authority to support the proposition that solicitors must warn clients of risks arising from ambiguous documents, even if their own view is that the document is sound.

Court's Reasoning and Analysis

The court began by examining the meaning of the restrictive covenant, applying established principles of construction from ICS v West Bromwich Building Society. The factual matrix included the parties’ intentions: the school’s desire to develop and the vendor’s wish to protect the adjoining property. The trial judge found the covenant clear, interpreting "height" to include chimney pots, and held that the Respondents were not negligent in drafting or advising on the covenant.

However, the appellate court found that there was real scope for dispute about the covenant’s meaning, particularly whether the height restriction included chimneys or was limited to the roofline. The court noted that the vendor’s concern would likely have been the volume of the building rather than features like chimneys or spires.

Importantly, the court found that the Respondents’ solicitor knew of a potential dispute and threat of litigation arising from the covenant’s construction but failed to advise the client of the risk of differing interpretations. The court held that even if the solicitor’s own view was defensible, he was obliged to caution the client about the possibility of alternative constructions and associated litigation risk, in line with the duty described in Dixie v Parsons.

The court identified inconsistency in the trial judge’s findings concerning the solicitor’s knowledge of potential litigation and held that the judge’s conclusion that there was no negligence in the advice given in October 1994 could not stand. The court emphasized that a reasonably competent solicitor should have pointed out the risk of dispute to the client under the circumstances.

Holding and Implications

The court ALLOWED THE APPEAL, overturning the trial judge’s finding that the Respondents were not negligent in the advice given in October 1994.

The decision implies that solicitors advising clients on potentially ambiguous restrictive covenants must explicitly warn of risks arising from possible alternative interpretations and the potential for litigation, even if the solicitor holds a confident view on the matter. The case clarifies the scope of a solicitor’s duty to advise on legal risks beyond simply stating their professional opinion.

No new precedent was established regarding the precise meaning of the covenant; the ruling focused on the duty of care in legal advice under conditions of ambiguity and risk.